This study estimates the causal effect of physical activity on medical care utilization and costs. Unlike prior efforts in this space, the estimation procedure accounts for potential endogeneity between physical activity and outcomes. The primary hypothesis tested contends that physical activity results in a reduction in medical care utilization and costs. The study relies on data from the Medical Expenditure Panel Survey (MEPS), the National Health Interview Survey (NHIS) and the Health and Retirement Study (HRS). Physical activity is instrumented using variation in residential density at either the zip code or census tract level. Na[unreadable]ve analyses without the use of an instrumental variable are also conducted. This study has implications for individuals, payers and policy makers. The primarily contribution is the identification of the magnitude and timing of the causal link between physical activity and utilization or costs in the US adult population. [unreadable] [unreadable] [unreadable]